By: Administrator

 Utilities-Only Light Switch Tax Will Send More Manufacturing Jobs Overseas 

 House Energy and Commerce Committee Chairman Henry Waxman was quoted yesterday (Calif.) saying that  he would “absolutely” seek to keep greenhouse gas limits alive in a House-Senate conference if the Senate approves energy legislation this summer that omits carbon provisions. “It would be open in conference to consider because our bill has it,” Waxman told The Hill Wednesday.  (http://thehill.com/blogs/e2-wire/677-e2-wire/106515-waxman-to-push-carbon-limits-in-conference-if-senate-falls-short).

Will those greenhouse gas limits be in the form of a utility-only carbon cap? A light switch tax?  E&E reports that this won’t likely be good for manufacturing: http://www.eenews.net/EEDaily/2010/07/02/2/ .  Following are some highlights from the story.

“Manufacturers would likely be hit by increasing electricity costs because the bill would constrain greenhouse gas emissions from coal-fired power plants. "We'd be looking for some means by which to offset those cost increases in the bill," O'Hare said, but that could create political problems because the manufacturing sector won't be capping its emissions.”

“The American Iron and Steel Institute does not favor a utilities-only approach, said spokeswoman Nancy Gravatt. "Steel is a very energy-intensive industry thus such an approach would result in a huge spike in energy costs putting U.S. steelmakers at great competitive disadvantage to steel producers from other countries," such as China, India and Brazil, who do not face the same costs and produce steel with higher emissions than the United States.”

“Several moderate Democrats who are considered swing votes on climate legislation have also expressed concerns about how a utility-only approach would affect their region's manufacturing economy.”

"What happens when utility prices go up for manufacturing?" Sen. Sherrod Brown (D-Ohio) asked last week. "There are more questions than answers at this point. I don't say don't look at it or don't try to figure out a way to do that, but I think the questions are not close to being answered."

Meanwhile, this Washington Post Op-Ed flags that in the recession battle, China and Germany are winners because they support their manufacturing businesses:  http://www.washingtonpost.com/wp-dyn/content/article/2010/06/30/AR2010063004199.html.